On March 22, the Tennis Industry Association (TIA) issued a press release titled, ” 2014 State of the Industry Values Tennis Economy at $5.55 Billion.” The emphasis was placed on $5.55 million.
There is a reason the TIA press release did not mention the amount of change in the value of the industry. A year ago TIA reported the tennis industry was valued at $5.4 billion in 2011. Between 2011 and 2013, the value of the tennis industry increased by $.15 billion, or 2.8%. Between 2011 and 2013, the CPI for all items increased by 3.2%.
The value of the industry did not keep up with the increase in inflation. In other words, the net value of the industry declined slightly over the past two years.
Tennis is an important part of our society, it is a small industry that employs workers in all states; however, the tennis industry is not a significant part of the U.S. economy.
Nominal GDP increased from $15.5 trillion in 2011 to $16.7 trillion in 2013, an increase of 8.2%. (The nominal GDP is used because the TIA data is not adjusted for inflation).
The value of the industry increased at a rate less than GDP output. In other words, the value of the tennis industry expanded at a rate lower than the overall economy, i.e. tennis is losing market share.
There are three possible reasons for the “stagnation” of the value of the industry.
• Over the past year, the sport attracted more “occasional players” than “frequent” players. While the total number of players may have increased, the newcomers didn’t spend as much as the industry core, the “frequent” player. Historically, the industry has a poor track record of converting “occasional players” to “frequent players.” For example, there were only 5.9 million frequent players in 1999. Today that number is about 5.4 million.
• There is a flaw in the methodology for the collection of the TIA data.
• The industry is growing; however, there are weaknesses.
The TIA has to publicly spin the data – that is what they are getting paid to do. Hopefully they are accompanying the spin with a dose of reality in board rooms and behind closed doors.